Safe and Sound

DIVERSIFIED MEMBERS

DETROIT, MI
5
Star Rating
Started in 1929, DIVERSIFIED MEMBERS is an NCUA-insured credit union headquartered in DETROIT, MI. The credit union holds $412.1 million in assets, according to December 31, 2017, regulatory filings.

With 71 full-time employees, the credit union currently holds loans and leases worth $130.6 million. DIVERSIFIED MEMBERS's 24,323 members currently have $320.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DIVERSIFIED MEMBERS exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is essential. It acts as a cushion against losses and affords protection for members when a credit union is struggling financially. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, DIVERSIFIED MEMBERS scored 30 out of a possible 30 points, exceeding the national average of 15.65.

DIVERSIFIED MEMBERS appears to be more resilient than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these types of assets may eventually have to use capital to absorb losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.

DIVERSIFIED MEMBERS scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 38.09.

The credit union's ratio of problem assets was 0.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings may be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, likely making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, have less ability to do those things.

DIVERSIFIED MEMBERS did below-average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's outperforming its peers in this area.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.